Monday, June 9, 2008

At least one thing is no longer in any doubt: this is the world economy’s third oil price shock, following in the footsteps of the Opec crises of the 1970s and early 1980s

Oil price shock fuels fear of UK stagflation It has once again sparked fears that the UK is poised for a nasty period of stagflation

The rise in oil prices to almost $140 a barrel on Friday put to an end any doubt that high crude costs would soon ebb away. It has once again sparked fears that the UK is poised for a nasty period of stagflation - high inflation and low growth.

Posted by big chris @ 04:30 PM (747 views)
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5 thoughts on “At least one thing is no longer in any doubt: this is the world economy’s third oil price shock, following in the footsteps of the Opec crises of the 1970s and early 1980s

  • doom&gloom says:

    You know Gordon is on a losing streak when he gets the blame for this:

    “In another sad example of Gordon Brown’s unfortunate timing, UK North Sea production peaked in 1999, when oil prices hit their rock-bottom.”

    Go Daily Torygraph – keep on kicking! Ha!

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  • Just checked Brent Crude and it is up 2.1% today. $136.00 a barrel. When will it end!?!

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  • extracted quote:-

    As this plays out it is important to remember that the rise in energy prices may be an artificially induced bubble.

    As Stef Zucconi puts it:

    Peak Oil…

    Hmmm

    One of those subjects which has the potential to divide Conspiraloons straight down the middle

    There are many loons out there who believe that much of the apparently fascistic, aggressive behaviour of Western governments, especially the US and the UK, is driven by the impending shortfall in global energy supply and the need to find excuses to occupy other countries and to make preparation to clamp down on dissent at home when the lights start going out

    I’m not one of them

    I’m one of those loons who believes that, yes, finite energy resources are an issue but, no, that’s not the reason why the price of oil, and food, have been going through the roof recently

    I once worked for a company which traded, amongst other things, cocoa. The firm was a real cocoa trader; buying cocoa from real suppliers, transporting it in real ships and selling it on to real customers. And every now and again, I and half a dozen other people who made a living counting stuff would fly around to take stock of our company’s prodigious physical holdings of the yummy brown stuff. Our firm held onto a ridiculous amount of cocoa – much more than it needed to meet its immediate or even medium term requirements. Some of the stocks were literally years old.

    The reason why the firm held onto so much was because, thanks to the involvement of hedge funds and other speculators, the cocoa futures market had become an absolute f*cking joke. It was simply cheaper and less risky to sit on tens of thousands of tons of physical stock rather than expose the company to a market being mugged by characters who were using the futures exchanges as a (rigged) casino

    The futures pricing of cocoa had become, just like the price of oil or wheat today, no more a product of genuine supply/ demand issues than the price of Dutch tulips 400 years ago or Florida real estate every thirty years or so.

    And it comes as no surprise that very few people given a mainstream voice are connecting the very close timing of the collapse in property speculation, central banks printing shed loads of lovely inflationary money and the sharp rise in commodities prices.

    It shouldn’t be rocket science but the obvious conclusions seem to be beyond the grasp of people who make a living pretending to tell the rest of us what’s going on.

    source:- http://www.sott.net/articles/show/158819-Signs-Economic-Commentary-for-9-June-2008

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  • @Malct:

    “may be an artificially induced bubble”

    I’d like to see the supply-and-demand explanation that can explain a $10 rise in one day… There isn’t one, it’s a pure speculative bubble and someone needs to supply a pin.

    I tried creating a petition on the PM’s website asking the government to regulate this market and it was rejected due to being ‘outside the government’s remit’!

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  • 4. Kruador

    ‘outside the government’s remit’!

    INCREDIBLE, but probably true for now, in a certain context, given recent events etc etc.

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